Waging a patent war

A competitive smartphone market is resulting in a lot of lawsuits

by Cigdem Iltan

Smartphone makers have been duking it out in the courts more than they have on store shelves in the past few weeks, and analysts say sales numbers may explain why. Devices that run Google’s Android platform now outshine Apple’s iPhone: first-quarter market-share estimates this year show Samsung has hurdled to 13 per cent from three per cent last year, while HTC jumped to 10 per cent from six. Some analysts believe the results have prompted Apple to lash out with a series of patent infringement lawsuits aimed at HTC, Samsung and Motorola, the world’s top three Android handset manufacturers.

Apple’s market share rose slightly too, but the tech giant’s third-quarter financial results show that nearly half of its revenue comes from the iPhone. Google chair Eric Schmidt last week came out swinging against Apple, accusing its execs of trying to tangle their competitors in a legal web. “They are not responding with innovation, they’re responding with lawsuits,” he said. “We have not done anything wrong.” But it is in Apple’s nature to be a tough litigator, technology analyst Carmi Levy says. “It would be naive of us to think Apple is running scared and is using courts to protect itself,” he says. During an earnings call last month, Apple COO Tim Cook said: “We have a very simple view here. And that view is that we love competition. But we want people to invent their own stuff. And we’re going to make sure that we defend our portfolio fervently.”

While companies that are assertive in the courts run the risk of diverting attention from the marketing of their wares, the manufacturers involved in the ongoing smartphone patent wars are sophisticated enough to focus on both areas, says Levy. Whether court battles impact innovation may be up for debate, but the power of litigation clearly isn’t: after a U.S. International Trade Commission judge recently ruled that Taiwan’s HTC had infringed on two Apple patents, China’s 21st Century Business Herald reported that two Chinese smartphone makers are considering jumping ship from Android to Microsoft’s Mango Windows Phone 7 operating system, raising the question of whether other companies may eventually follow suit.




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